Binance, one of the world's largest centralized cryptocurrency exchanges, announced a temporary halt to Bitcoin withdrawals for the second time in less than 12 hours, citing network congestion as the reason for the suspension.
The exchange said its team was working on a solution and would resume Bitcoin withdrawals as soon as possible. Binance had taken similar action on Sunday for about 90 minutes, causing speculation on social media platforms.
"We've temporarily closed #BTC withdrawals due to the large volume of pending transactions. Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible. Rest assured, funds are SAFU," Binance said on Twitter.
We've temporarily closed #BTC withdrawals due to the large volume of pending transactions.
— Binance (@binance) May 8, 2023
Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible.
Rest assured, funds are SAFU.
Following the news, Bitcoin's price fell by approximately 3 percent, trading at around $28,200 on Monday. The top 100 digital assets index also recorded a moderate decline. However, an hour later, the exchange reported that Bitcoin withdrawals had resumed, and the price of the cryptocurrency rose slightly to around $29,000.
The suspension of Bitcoin withdrawals came as the network's mempool, where transactions wait to be added to the blockchain, was clogged with a significant backlog. On Sunday afternoon, the number of unconfirmed Bitcoin transactions in the mempool reached around 395,000, a substantial increase from the 56,500 recorded in April.
According to the financial research platform YCharts, Bitcoin transaction fees have also significantly increased in recent weeks. They reached their highest levels in almost two years on Friday, averaging $9.62 per transaction. The surge in transaction fees has been attributed to the growing use of Ordinals, a protocol for minting NFT-like assets on Bitcoin, which has led to an increase in fungible BRC-20 token trading.
The market cap of BRC-20 tokens has surged to $446 million since March, with the total number of inscriptions exceeding 4.3 million as of Sunday. Despite the congestion on the Bitcoin network, crypto exchange OKX reported that Bitcoin deposit and withdrawal services were functioning normally, albeit with high transaction costs.
Bitcoin might see Bollinger Bands breakout
Bitcoin traders eagerly anticipate the possibility of the world's most famous cryptocurrency making historic gains, with a potential breakthrough in sight. Popular trader Titan of Crypto recently discovered a rare bull signal on the Bitcoin monthly chart's Bollinger Bands indicator that indicates Bitcoin might experience an "inexorable breakout."
Bollinger Bands are key volatility indicators that monitor price timeframes by tracking the price's contact with the bands or breaking beyond them. Bitcoin had seen significant gains in the past when it broke through into the upper section of the Bollinger Band channel, and Titan of Crypto predicts it could happen again.
According to Titan of Crypto, Bitcoin's price is attempting to break above the 20-period simple moving average (SMA) line. He predicts that the cryptocurrency could reach a solid $63,500 as its first target.
Last month, John Bollinger, the band's creator, also argued that Bitcoin was at a crucial stage on daily timeframes. During that time, the price was testing the SMA line as support, breaking through to range around it.
Despite Bitcoin's decline from local highs of $31,000, low-timeframe Bollinger Bands norms remain intact, according to analyst CryptoCon. As BTC price action currently impacts sentiment in different ways across various timeframes, the consensus remains that Bitcoin's upside mainly lies ahead as the block subsidy halving approaches.
"Even with the last drop in #Bitcoin price, this time is still not different for the Bitcoin 3 Week Bollinger Bands!" CryptoCon wrote on Twitter. "Large corrections have always taken place after the upper parameter is met AND exceeded, but not a moment before. The price of the upper band is still $35,790."